In US, New Legal Ploy May Protect Bad Patents

2017-10-20

It had been a bad three months for Allergan, Inc. The drug maker’s stock price had fallen over 20 percent, as the company faced two legal challenges to the patents on its blockbuster drug, Restasis. Then, on 16 October, Allergan lost one of those challenges. A US court found the patents invalid. Allergan vowed to appeal, thus maintaining its monopoly on the drug until a final court determination, which could be over a year away. But Allergan’s monopoly could collapse far sooner, if the company were to lose the second challenge to the patents, before the USPTO. Such a loss was probable, as the agency had already found a “reasonable likelihood” that prior art invalidated the patents on Restasis. So back in September, Allergan employed an innovative legal strategy: The company gave its patents to a Native American tribe, and the tribe claimed its sovereign immunity prevented the USPTO from reviewing the patents’ validity. If this strategy were to succeed, it will do far more than just boost Allergan’s bottom line. The new strategy will increase the power of patent owners, help patent trolls, and dramatically alter the US patent system.